Investing.com - The dollar rose to a more than one-year high against a basket of other major currencies on Tuesday, while the euro remained under heavy selling pressure amid growing expectations that the European Central Bank will announce additional easing measures.
EUR/USD touched lows of 1.3110, the weakest level since September 2013 and was last down 0.08% at 1.3114.
The euro has come under heavy selling pressure in recent sessions amid mounting speculation that the ECB will implement fresh measures as a way to shore up long term inflation expectations after data showed that the annual rate of euro zone inflation slowed to a five year low in August.
Meanwhile, concerns that sanctions against Russia would act as a drag on growth in the euro area mounted after data on Monday showed that manufacturing activity in the bloc slowed last month.
The dollar advanced to seven month highs against the yen, with USD/JPY climbing 0.54% to 104.90.
The dollar was boosted by weakness in the euro and by gains in Asian equities markets overnight, which curbed investor demand for the safe haven yen.
Investors were looking ahead to the latest U.S. employment report, due for release on Friday, for further indications on the strength of the recovery in the labor market, a key factor in deciding the future path of monetary policy.
Elsewhere, GBP/USD was down 0.46% to 1.6529, the lowest since March.
Sterling came under pressure earlier in the session after the latest opinion polls showed that support for Scottish independence is gaining ground ahead of a referendum due to take place on September 18.
The pound shrugged off data showing that activity in the U.K. construction sector expanded at the fastest rate in seven months in August, pointing to a continued strong recovery in the sector.
USD/CHF was close to 10-month highs at 0.9205.
Earlier Tuesday, official data showed that Switzerland’s economy stagnated in the second quarter, with growth dragged down by falling exports and lower construction spending.
On a year-over-year basis, the Swiss economy grew 0.6%, missing expectations of 1.7% and slowing from 2.1% in the previous quarter.
AUD/USD was down 0.41% to a one week low of 0.9291 after the Reserve Bank left rates unchanged earlier Tuesday and said that the overvalued Australian dollar is weighing on efforts to support growth.
Elsewhere, NZD/USD fell 0.52% to 0.8332, while USD/CAD added 0.40% to trade at 1.0913.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.26% to 82.98, the highest since July 2013.